The Obamacare tax deconstructed

Several developments related to the Affordable Care Act will be hitting many filers in the pocketbook this tax season, but they need to keep an eye on two other issues that could begin affecting millions of people next tax season.

This year's changes include an increase in the minimum threshold for deducting medical costs for people under 65, to 10 percent of adjusted gross income from 7.5 percent of AGI.

"That's going to eliminate medical deductions for lots of people who were taking [them] before," said Michael D'Addio, tax principal in the New Haven, Conn., office of Marcum and a co-chair of the firm's ACA division.

Two new Medicare-related taxes also loom this season for high-income earners.

Luke Sharrett | The Washington Post | Getty Images

Patient with medical coverage through Medicaid expansion under the Affordable Care Act.

The first is a 0.9 percent Medicare tax on earnings above $200,000 for single filers and $250,000 for married couples filing jointly. The tax, addressed on IRS Form 8959, is deducted from a high-earner's paycheck even if they will end up filing jointly and being exempt from the tax, D'Addio noted. In that case, he said, they have to file for a refund.

The second tax, a 3.8 percent Medicare surtax on net investment income for high-income filers, is driving preparers and their clients "crazy," D'Addio said, because it is complicated and will affect "lots and lots of taxpayers."

The tax, addressed on Form 8960, is assessed on the lower of two numbers: net investment income for the year or modified AGI over $200,000 for single filers and $250,000 for joint filers.

The main Obamacare-related tax or penalty facing potentially millions of people is not due until next year, but avoiding it will require action before the end of this tax season.

Under the ACA, most people are required to have obtained some form of coverage by March 31 or face a tax penalty when they file next year. That penalty is $95 a person (and up to $285 for a family) or 1 percent of AGI above $20,400 for a family, whichever is higher. It is deducted from any refund owed by the IRS.

Brian Haile, senior vice president for health care policy at Jackson Hewitt Tax Service, said that many clients erroneously believe the penalty is only $95 per adult and $47.50 per child.

When he tells clients that if they make $100,000 a year they will owe more than $700 for going without insurance, he said, "They say, 'You're kidding me!' "

Haile said most people are also unaware that they must update the federal government this year if they are receiving subsidies to offset the cost of insurance premiums bought on a health-care exchange and the size of their household changes—for example, from a birth, a child turning 21, a marriage or a divorce.

The reason is that subsidy amounts are based on household size, and if it shrinks during the year but you still receive the same amounts, you may owe the IRS to rebate the excess subsidy when you file next year.

Likewise, D'Addio at Marcum said, people receiving subsidies for coverage bought on an exchange should keep in mind that if their 2014 income is higher than the adjusted gross income amount they used to apply for those subsidies, they may also owe the IRS a rebate in 2015.

Most people who applied for such subsidies by the end of last year would not have had their 2013 tax information available, instead using 2012 tax returns as the basis for determining subsidy eligibility, he said.